Corporation Tax for Companies Over 5 yrs?

[gimlet]

Sell Overseas Property

It would be easy enough to fix things so that the debt did not become "exigible" unless and until repayment is demanded, but it's the alternative limb of becoming extinguished by prescription that sounds worrying.

[BG9374]

Sell Overseas Property

Loan funds of 10,000 leva, is no paperwork shown on year one of the accounts, no funds through company bank account, no evidence of loan...

Company formation 2010, so during five years no repayment. 2015 arrives and the following tax year your liability is now ten percent of 10,000 leva.

Probable correct, "been" plenty bugging me since arrived and bought during this year.

The way to prevent could be to have agreement of bypasses the banks, or else cost a fortune; wont then have a non trading company? Since having to repay a loan?

Another way could be to buy shares in the company instead of a loan repayment?

One share at 10,000 leva? Again paperwork, evidence is the key.

[kazz]

Sell Overseas Property

Not certain about this but I think 'active' in Bulgarian company terms means income, not just expenses. Otherwise just buying the property would could as company activity.

[scanniaman]

Sell Overseas Property

'Active' as in 'trading' and I guess that most of the Brits companies will be non-active or non-trading therefore making no money or profit.
What next - paying tax on any theoretical profit that the land has made ?
scanniaman.

[fizzgiguk2001]

Sell Overseas Property

Hi all
Think it all depends on how the funds to buy the land is entered on the first company balance sheet if at all will have to ask my accountant for these details before knowing what procedure was used when i bought but it could be a problem.

The whole of article 46 reads like this:

Article 46. (1) (Amended, SG No. 110/2007) Upon determination of the tax financial result, the accounting financial result shall be credited with the amount of the debts of the taxable person, and the said crediting shall be effected in the year in which one of the following circumstances occurs:
1. the debts are extinguished by prescription, but not more than five years after the time when the debt became exigible;
2. the bankruptcy proceedings against the taxable person have been closed by a confirmed plan for rehabilitation which provides for incomplete satisfaction of the creditors; the crediting shall be effected by the amount of the diminution in the debt;
3. an effective judgement of court has decreed that the debt or part thereof is undue;
4. the creditor has relinquished the claim thereof by a judicial procedure or has redeemed the said claim; the crediting shall be effected by the amount redeemed;
5. before the lapse of the prescription period, the debts have been extinguished by virtue of a law;
6. the taxable person has submitted a motion for expungement.
(2) (Amended, SG No. 110/2007) Paragraph (1) shall not apply, where the debt was extinguished or accounting income were accounted for as a result of a write-off of the debt in the year of occurrence of a circumstance under Paragraph (1).
(3) (New, SG No. 110/2007) Where Paragraph (1) was applied during a preceding year, upon determination of the tax financial result for the current year, the accounting financial result shall be debited with:
1. the amount of the debt extinguished during the year;
2. the accounting income accounted for during the current year as a result of a write-off of the debt.
(4) (New, SG No. 110/2007) The debiting under Paragraph (3) shall be up to the amount of the crediting under Paragraph (1) during the preceding years in respect of the respective debt.
Tax Treatment of Credit for Input Tax Deducted in Respect
of Assets Available or upon Registration or Re-registration
under Value Added Tax Act
Article 47. (1) (Supplemented, SG No. 110/2007) Upon determination of the tax financial result, the accounting financial result shall be credited with the amount of the credit for input tax deducted by the taxable person in respect of the assets available as at the date of registration or re-registration under the Value Added Tax Act, where accounting income is not accounted for in connection with the credit for input tax deducted.
(2) (Repealed, SG No. 110/2007).
(3) (Amended, SG No. 110/2007) Paragraph (1) shall not apply where:
1. the value added tax is not included in the historical cost of the asset, or
2. the asset is not a tax depreciable asset and the said asset was written off in the year of registration or re-registration under the Value Added Tax Act.
(4) (New, SG No. 110/2007) In case of a write-off of an asset which is not a tax depreciable asset and where to Paragraph (1) was not applied in a preceding year, upon determination of the tax financial result for the current year, the accounting financial result shall be debited with the amount of the credit for input tax deducted for the respective asset wherewith the accounting financial result has been credited according to the procedure established by Paragraph (1).

[Slaphead]

Sell Overseas Property

I think something should be done to clear this up!

[BG9374]

Sell Overseas Property

Next year when we are able to own our own land, we exit asap from running companies.

Plain English, gimmie back the money u owe me company, or, shall take the lot, house, car, land, etc.

Either way accountants next year going to make a few extra leva closing all those companies no one wants anymore.

So glad I arrived with less than a tax year. BG, have to love the place. :

[solicitor]

Sell Overseas Property

just relax. so you finance the purchase of your company asset with your personal funds and have no document about it. You can always create a loan contract for all the money you've used to set up the ltd.and buy the property + all fees and taxes that you have papers for ..... you can consolidate this debt into one contract and put a date for paying back ... it could be 2015,2020 whenever ... there are no limitations about it.
this is just a wrong interpretation of the corporate tax law... can you imagine what could happen if there is a tax like this .... the whole idea of having a company will collapse because you cannot do business only with the initial company capital.
Again, don't panic.

[kazz]

Sell Overseas Property

That's reassuring solicitor.
Would you be offended if I asked if you're a Bulgarian solicitor?
I don't mean invade your privacy but your answer would carry so much more weight if we knew you were speaking from a point of knowing Bulgarian law rather than simply expecting it to be sensible.
I suspect that it is still needed to have the information correctly documented and that it's best to get this done before you sell the house

I do know that our accountant, when taking over accounts previously done by others has often muttered about things not having been entered under the correct headings on the balance sheets. I wonder if this might be why it matters?

[gimlet]

Sell Overseas Property

As far as limitation periods are concerned I picked this up from a debt forum. The good lady poster seems to know what she is talking about.

Rosica Petkova-Kavazova says:
26/02/2011 at 17:26

Veselya, in terms of the limitation here is that you can benefit from:
The limitation period for money claims is generally three years. But claims of this type has many features. Normally, according to current regulations, if within three years due amounts are not sought by the creditor, then the expiration of that period the obligation is extinguished by prescription. However, if within those three years, enforcement proceedings be initiated by the creditor to collect the amounts due - then the limitation period is interrupted. Specifically, that during the enforcement case - prescription not run, and after the trial (which can often be lasting 2-3 years) - begins a new prescription, ie further three years (Art. 117 CPA). So over a period enforcement proceedings shall be resumed, thus making remains outstanding and sought in virtually indefinitely.
http://www.gechev.com/финанси/при-проблеми-с-частни-съдебни-изпълни

Any one who wishes to immerse themselves in the fons et origo of knowledge about such matters might resort to Articles 110 to 120 of the law on Obligations and Contracts - ЗАКОН ЗА ЗАДЪЛЖЕНИЯТА И ДОГОВОРИТЕ

http://www.izmamno.com/wp-content/zakon ... vorite.pdf